UNH Lodging Index Continues to Climb

UNH Lodging Index Continues to Climb

U.S. lodging executives were more optimistic about general business conditions in January than the prior month, according to the UNH Lodging Executives Sentiment Index (LESI) for the current month ending January 2013. The index increased from 53.8 in December 2012 to 61.7 in January 2013.

“This increase results from lodging executives’ positive opinions of the present general business conditions for their properties, as well as their positive sentiment for how they view general business conditions 12 months in the future. Expectations about room reservations during the same 12-month period also moved upward,” said Nelson Barber, associate professor of hospitality management, who manages the index.

Twenty-seven percent of lodging executives indicated current business conditions were good, an improvement from 15 percent last period, while 67 percent indicated conditions were normal, down from 69 percent during the same period. Seven percent of the executives indicated such conditions were bad, an improvement from last period’s reading of 15 percent.

Managed by the Department of Hospitality Management at the UNH Peter T. Paul College of Business and Economics, LESI is based on a monthly survey of lodging executives representing companies with more than 2.5 million hotel rooms across lodging segments and geographic regions of the United States -- more than 55 percent of all U.S. rooms.

Executives are asked about the present and future conditions of the market. Executives also are asked to report their outlook during the next 12 months about room reservations and employment practices, such as an increase or decrease of their non-managerial work force.

The LESI indices follow the Institute of Supply Management's Index (ISM) method of tracking leading indicators. A LESI survey reading of greater than 50 indicates expansion whereas a reading below 50 indicates decline and the distance from 50 in either direction is indicating the strength of the expansion or decline. During this same period of time, the ISM Index increased to 53.1 from 50.7.

Looking forward, Barber said 27 percent of the executives thought conditions will be better in the next 12 months, while 73 percent indicated they will be the same. This period, no one thought they would be worse, unchanged from last period. These future results were an improvement compared to the previous period where 15 percent thought the future would be better, 85 percent thought the future would be the same, and no one thought the future would be worse.

Looking forward 12 months, lodging executives do not expect to add more nonmanagerial employees, representing no change in expectations for lodging executives reporting from December 2012. This period’s no change is not in line with the ISM Employment Index, which increased by 2.1 percentage points, registering 54.0 percent; however is in line with the national unemployment rate which increased to 7.9 percent in January 2013 from 7.8 percent in December 2012 as reported by BLS (Bureau of Labor Statistics).

The UNH Peter T. Paul College of Business and Economics offers a full complement of high-quality programs in business, economics, accounting, finance, information systems management, marketing, and hospitality management. Programs are offered at the undergraduate, graduate, and executive development levels. The school is accredited by the Association to Advance Collegiate Schools of Business, the premier accrediting agency for business schools worldwide.